From July 01, 2025, when shall taxpayers pay fixed VAT in Vietnam?

From July 01, 2025, when shall taxpayers pay fixed VAT in Vietnam?

Pursuant to Clause 3, Article 12 of the Law on Value-Added Tax 2024 (effective from July 01, 2025), regulations on the direct calculation method are as follows:

Direct Calculation Method

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2. The VAT payable using the direct calculation method based on revenue is determined by multiplying the percentage rate by the revenue, applied as follows:

a) Applicable objects include:

a1) Enterprises, cooperatives, and alliances of cooperatives with annual revenue below the revenue threshold of VND 1 billion, except in cases opting to apply the deduction method as stipulated in Clause 2, Article 11 of this Law;

a2) Households, individual businesses, except as specified in Clause 3 of this Article;

a3) Foreign organizations without a permanent establishment in Vietnam, individuals residing abroad who are non-residents of Vietnam with income arising in Vietnam and have not fully implemented accounting, invoice, and document policies, excluding foreign suppliers specified in Clause 4, Article 4 of this Law;

a4) Other organizations, except in cases where tax is paid using the deduction method as stipulated in Clause 2, Article 11 of this Law;

b) The percentage rate for calculating VAT is specified as follows:

b1) Distribution, supply of goods: 1%;

b2) Services, construction without providing raw materials: 5%;

b3) Production, transportation, services with goods attached, construction with raw materials: 3%;

b4) Other business activities: 2%;

c) Revenue for calculating VAT is the total sales amount of goods and services recorded on sales invoices, including surcharges and additional fees received by the business entity.

3. Households, individual businesses that do not implement or inadequately implement accounting policies, invoices, documents as prescribed by law shall pay fixed VAT stipulated in the Tax Administration Law.

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Therefore, in cases where households or individual businesses fail to implement or adequately implement accounting policies, invoices, and documents as prescribed by law, they will pay fixed VAT.

From July 01, 2025, when shall taxpayers pay fixed VAT in Vietnam? (Image from the Internet)

Do household businesses that pay fixed VAT declare tax quarterly or annually in Vietnam?

Pursuant to Clause 3, Article 8 of Decree 126/2020/ND-CP, the regulations regarding types of taxes declared monthly, quarterly, annually, and upon each occurrence of a tax obligation and tax finalization declaration are as follows:

Types of taxes declared monthly, quarterly, annually, upon each occurrence of a tax obligation, and tax finalization declaration

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3. Types of taxes, other revenues belonging to the state budget that are declared annually, include:

a) Business license fees.

b) Personal income tax for individuals working as lottery agents, insurance agents, multi-level sellers who have not withheld tax during the year as they have not reached the level required to pay tax but by year-end determine they are liable for tax.

c) Types of taxes, revenues from household businesses, individual businesses paying fixed VAT, individuals leasing property who choose to declare tax annually.

d) Non-agricultural land use tax.

Taxpayers declare tax annually for each parcel and comprehensively for homestead land in cases where they have land use rights over multiple parcels within a district or multiple districts within the same province-level area. Taxpayers are not required to declare comprehensively in the following cases:

d.1) Taxpayers have land use rights for one parcel or multiple parcels within the same district, but the total taxable land area does not exceed the homestead land threshold where they have land use rights.

d.2) Taxpayers have land use rights for multiple parcels in different districts, but no parcel exceeds the threshold and the total area of taxable parcels does not exceed the homestead land threshold where they have land use rights.

dd) Agricultural land use tax.

e) Land rent, water surface rent paid annually.

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Therefore, household businesses paying fixed VAT must declare VAT annually.

What is the deadline for submitting VAT tax declaration dossiers for household businesses paying fixed VAT in Vietnam?

Based on Clause 3, Article 13 of Circular 40/2021/TT-BTC, the deadline for submitting tax declaration dossiers for individual businesses paying fixed VAT is specified as follows:

[1] The deadline for submitting tax declaration dossiers for individual businesses paying fixed VAT is no later than December 15 of the year preceding the tax year.

[2] In cases of new business activities or individuals switching to the declaration method, changing business sectors, or changing business scale during the year, the deadline for submitting tax declaration dossiers for individual businesses is no later than the 10th day from the commencement of business, or the switch of tax calculation method, or change in business sector, or change in business scale.

[3] The deadline for submitting tax declaration dossiers for cases where individual businesses use invoices issued by the tax authority for retail upon each occurrence is no later than the 10th day after the revenue arises requiring invoice issuance.

Thus, the deadline for submitting tax declaration dossiers for household businesses paying fixed VAT is no later than December 15 of the year preceding the tax year.